In order to improve the perf ormance of data hiding algorithm,a reversible infor mation hiding method for gray image based on prediction method selection and his togram shifting is proposed in this paper.In this scheme,two kinds of relatively accurate prediction methods are used to forecast the pixel values and mark the mutated pixels without any treatment.Finally,a relatively accurate prediction m ethod is selected as the final prediction method for every block.And then,the pr ediction error is calculated by the prediction method,and difference histogram i s generated by using the prediction error value.Secret data are embedded in pixels whose prediction error is located in embedding area by using the hi stogram shifting technique and prediction error expansion scheme.The algorithm a daptively selects the optimal prediction method in the two prediction methods an d makes full use of the redundancy of the image,which effectively improves the e mbedding capacity (EC).Experimental results clearly indicate that the proposed scheme makes full use of correlation between adjacent pixels,and it can improve the peak signal to noise ratio (PSNR) and whole performa nce and garantee EC simultaneously.